Examples of Effectiveness by Using ICDs with More Output

Example 1:

As D.R. Horton has expanded nationally, it has consolidated suppliers. (
Year 1997 – SIC 1531)

Explanation: The reduction in number of suppliers effectively extends the Output over which the supplier-related ICDs extend.

Example 2:

IBM refurbishes and then resells computers. (
Year 2001 – SIC 3571)

Explanation: The parts that IBM does not need to change in the refurbished computers are examples of ICDs that are used over more units of Output.

Example 3:

By shrinking stores and rolling them out in small towns, Big Box retailers are hoping to tap into a new pool of shoppers. (
Year 1999 – SIC 5399)

Explanation: The ICDs done for the bigger stores which can also be applied to the smaller stores, enable those ICDs to spread over more units of Output.

Example 4:

IBM aims to create a system that all divisions will use for tracking customer orders. (
Year 2003 – SIC 3571)

Explanation: This new single system for use by all divisions will enable the ICD of the design of the system to be used for more Output.

Example 5:

The Company standardized all processes. The cost reduction team insisted that files be stored alphabetically and in the same drawer at each work station. (
Year 2003 – SIC 6311)

Explanation: The standardization of the work processes enabled the Company to use a single training session to apply for all employees in the functional cost area. This extends the Output over which that training ICD applies.

Example 6:

Xerox consolidated seven general ledger systems into one and centralized work from four data centers into one. (
Year 1994 – SIC 3861)

Explanation: The standardization of the general ledger systems and consolidation of the data centers eliminated the number of set-up ICDs the Company used. This allowed the fewer set-up ICDs to be used over more Output.

Example 7:

A specialty steel manufacturer managed to convert customers to standardized, rather than customized, products over a five year period. (
Year 1991 – SIC 3312)

Explanation: By using standard products, the Company spread the product design ICDs over more Output.

Example 8:

Home Depot bought a private company that was the nation’s top direct mail marketer of maintenance and repair products to lodging managers. (
Year 1998 – SIC 5211)

Explanation: The acquisition of a company in a related business enabled Home Depot to spread its customer acquisition ICDs over more units of Output.

Example 9:

Schneider is the biggest transportation and logistics company in North America. It sends goods all over the world. It brokers freight to other carriers and it provides some financial services. (
Year 2002 – SIC 4213)

Explanation: The provision of more customer services related to transportation enables Schneider to spread its management ICDs over more units of Output.

Example 10:

Rival of Kansas City bought Bionaire of Montreal. Rival makes personal care and household appliances. Bionaire makes air purifiers and humidifiers. (
Year 1996 – SIC 3634)

Explanation: This acquisition enabled Rival to use fixed cost sales call ICDs over more units of Output.